A Quick Guide To Minimum Wage

minimum wage guide by stateBy Beth Braccio Hering, Special to CareerBuilder

Everyone from news reporters to government officials tosses around the term "minimum wage," but how much do you actually know about it? Here is a breakdown of some key elements:

The jobs

On July 24, 2009, the current federal minimum wage of $7.25 per hour went into effect. This does not mean that every job in the nation has to pay at least this amount, only those covered by the minimum wage law. The law applies to:

  • Employees of enterprises that have annual gross volume of sales or business done of at least $500,000.

  • Employees of smaller firms if the employees are engaged in interstate commerce or in the production of goods for commerce, such as employees who work in transportation or communications or who regularly use the mail or telephones for interstate communications.

  • Guards, janitors and maintenance employees who perform duties that are closely related and directly essential to such interstate activities.

  • Employees of federal, state or local government agencies, hospitals and schools.

  • Most domestic workers.

Even when an employee is covered by the minimum wage law, certain exceptions may allow an employer to pay less. Such cases may involve:

  • Workers with disabilities.
  • Full-time students.
  • People under age 20 in their first 90 consecutive calendar days of employment.
  • Tipped employees.
  • Student-learners, such as participants in vocational education.

The states

Businesses unaffected by the federal minimum wage law are still often subject to state laws regarding pay. As the following list shows, many states choose to keep their minimum hourly wage the same as the federal amount. (In cases where a job falls under both federal and state minimum wage laws, employees receive the higher of the two rates.)

Minimum wage by state, from lowest to highest (according to the Labor Department):

Why the differences? "That particular state may believe [a higher minimum wage] is in the best interest of its citizens -- increasing their incomes and standard of living, and, of course, their ability to pay higher or more state taxes," explains Martin J. Saunders, an attorney in the Canonsburg, Pa., office of Steptoe & Johnson PLLC. "Other states believe that the federal law sets a high enough minimum wage that subjects of this nature should be uniform throughout all the states and that a higher minimum than required by federal law will make both that state and its residents less competitive with other states as it increases the cost of employers to do business in that state. State minimum wages lower than the federal may be the result of a conscious decision . . . or simply a failure to amend the state law to increase its minimum wage when the federal government increased the federal minimum wage."

The issue

According to the Bureau of Labor Statistics, 4.4 million American workers earned wages at or below $7.25 per hour in 2010. The percentage of workers earning the minimum wage did not vary much across the major race and ethnicity groups or by gender. About 6 percent of white hourly-paid workers earned the federal minimum wage or less, compared with about 7 percent of blacks, 5 percent of Asians and 6 percent of Hispanics. Likewise, about 7 percent of hourly-paid women and 5 percent of hourly-paid men had wages at or below minimum.

A federal minimum wage was created as part of the Fair Labor Standards Act of 1938. The rate has gone up through the years, but it does not increase automatically. In order for it to go up, Congress must pass a bill and the president must sign it into law. States have their own policies for determining minimum wage. Ten states have minimum wages that are linked to a consumer price index, so the figure generally changes each year.

Today, people still debate what should be considered an acceptable hourly wage, how changes to it might affect businesses and how much the government should be involved in the issue. Notes Saunders, "As with all legislation, what ultimately is enacted into law is the result of lobbying and compromise."

Beth Braccio Hering researches and writes about job search strategy, career management, hiring trends and workplace issues for CareerBuilder. Follow @CareerBuilder on Twitter.

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Define your own personal goals.

If you have a minimum wage job and an are continuing your education and developing worth while experiences, you will move up. In bad economic times it is slower and more difficult. Manage your money and time well.

If you are not trying to increase your value in the work place, you will remain a minimum wage worker. Blame no one but yourself.

November 21 2011 at 6:49 AM Report abuse rate up rate down Reply
Judy Lynn

Minimum wage should be comparable to what we pay the pathetic United States Congress Members.
Let Grover Norquist and Wall - Street pay their salaries.

November 21 2011 at 6:16 AM Report abuse rate up rate down Reply
1 reply to Judy Lynn's comment

Wall Street and others do pay them. It is in an envelope under the table.

November 21 2011 at 7:55 AM Report abuse rate up rate down Reply

I sure hope you all vote out Obama and his "change"...he kept his promise there, that's for sure..he changed us into a poverty stricken, homeless, desperate country.

November 21 2011 at 5:32 AM Report abuse +2 rate up rate down Reply
1 reply to Sandy's comment

It takes years for the economy to get broken; and it takes years to mend. Do you, actually, think that the Great Depression had anything to do with policies of President Herbert Hoover's administration? It was the excesses of the previous decade that came crashing down the year after he was elected. The excesses during the President Ronald Reagan years made his successor, President George H. W. Bush, a one term president. President George W. Bush wasn't quite so lucky. The excesses during his administration caught up to him before he could get out of town. He fully expected to be back in Texas chasing tumbleweeds when everything blew up. The one regret President George W. Bush had was that he couldn't use the first draft of his farewell speech (the only one he had ever written by himself, I might add; and it was short and to the point).... "Apres moi, le deluge!"

November 21 2011 at 12:13 PM Report abuse +1 rate up rate down Reply

TO LOUIS: WOW, you really are brainwashed. I own a fast food store, and a car wash. I work 7 days a week, 15 hours a day...and after 6 years, I still have not been able to take a paycheck...not a dime. It all goes to the gov in one form or another and now our min wage is 9.04 for kids...THESE ARE STARTER JOBS AND IF YOU ARE STUCK IN A STARTER JOB..IT'S YOUR FAULT...YOU DROPPED OUT OF SCHOOL, GOT INTO LEGAL TROUBLE, STILL SMOKE POT OR DO OTHER DRUGS OR YOU ARE JUST LAZY. FAST FOOD STORES ON AVERAGE IF THEY ARE DOING GOOD..ONLY MAKE A PROFIT OF 5%...THAT'S A NICKEL OUT OF EVERY DOLLAR. The big ones like McD's does good, but the smaller ones suffer terribly. It's very hard work, and we have to deal with the kids that dfon't know how to figure tax on a hot dog, are lazy, rude, unreliable, steal, eat our food when we are not looking, cause an immense amount of drama..and we have to give them a raise!!!! You obviously do not own a small business nor do you know what you are talking about..you must just be another taker...someone who wants others to carry your load..

November 21 2011 at 5:30 AM Report abuse +1 rate up rate down Reply

Washington state just increased it's min wage to 9.04 as of Jan. 2012. At the same time workers comp increased their rate by 2.5% as usual, this Socialistic state insists on increasing min wage for the sole purpose of getting more tax money in one form or another. They lie to the people and tell them they are doing it for them, so the people voted for the yearly increases..however, had the Liberals who run this state told the people that if min wage were increased yearly, the taxes would go up, rent, food, gas, all would go up too also many people would lose their jobs because employers of these starter jobs cannot afford this ridiculously high min wage. I own two small business and I will be laying off 4 people come Jan.

If the state only told the truth for a change, maybe this state wouldn't be in such financial difficulty, maybe we wouldn't have nearly 30% unemployed teens and young people, maybe more businesses could stay open and hire these people.

But, the state of washington is full of left wing goofy people, dumbed down by the extremely liberal school system, we have a 52% drop out rate..high unemployment overall and with these fools in control, it will just keep going downhill just like California.

How dare the state tell me that I have to give everyone a raise? I have a 57 year old who is taking care of her grandkids...she needs the raise, always reliable, does a great job. But, NO, I have to give the kids who still live at home and are unreliable, and only want a little money for their cell phone and gas a raise...just so this horrible state can steal money tax money.

Liberals are idiots, and those who follow their ugly agenda are simply uninformed, uneducated, or smoking the stink weed. Sad that this country has fallen so far under the liberal leadership.


November 21 2011 at 5:20 AM Report abuse +1 rate up rate down Reply

Does it strike anyone but me as odd that out of the eleven former "confederate" states, five have no minimum wage law at all and two others have a minimum wage less than the federal minimum wage. I'm not sure what that means; but it sure looks like a carryover from the old "slave economy" days.

November 21 2011 at 4:02 AM Report abuse rate up rate down Reply
1 reply to hwtrendell's comment

it means if you don't like min wage you go find a higher paying job or go get educated.........ever notice those states with high min wage are the states with the highest governmenbt debt?

November 21 2011 at 5:20 AM Report abuse +1 rate up rate down Reply

The minimum wage is for Kids in High School and College to help pay expenses their parents wont because we are paying for everything else. If you are a grown Man or Woman and think you can take care of yourself or a family with a minimum wage job, you already know things are going to be tough even if you have 2 minimum wage jobs. If you want to earn more and do better, you have to Re-Position yourself and explore other career options. Now that the U.S. is at the brink of another reccession with people unemployed with Degrees and work experience, its going to be really tough for the unskilled, and uneducated to find a good paying job. The only thing I can suggest is to get into a training program in the medical field, join the military, or go to truck driving school. The reason I'm listing these occupations is because I am Retired from the U.S. Navy and I know what the military did for me and my family for the 20 Years I Served. I know what getting into the Medical field has done for my wife. She had a good job working at UPS for 12 years, but she wanted a career so she retired and went to Nursing school in 2001 and started as an LPN then became a RN, she will be graduating with her Masters of Science in Nursing Dec 8, 2011. I'm so proud of her...I at the same time went to truck driving school (13 Days) paid my dues on the road (1 Year) bought my own truck in 2002 and as of today own 15 trucks and 18 trailer under my own authority and employ 13 drivers. We Re-Positioned ourselves into what we hoped would be recession proof fields 10 years ago and it was the best investment we could have made, investing in ourselves and stepping out on faith. Our plan over the next 3 years is to grow our Trucking Company to 30 Trucks and have our Home Health Care and Physical Rehabilitation Company 80% funded and have our 3 sons fully trained and ready to manage both.

November 21 2011 at 3:43 AM Report abuse rate up rate down Reply

Minimum wage earners make up only 6% of the hourly workforce. 94% of workers earn more. In addition, many of these earners are very young (first jobs), or working part-time, or also receive tips which supplement their wages. It's ridiculous to whine about not being able to support a family on minimum wage...as a poster below says: "a family of four will die a slow death on minimum wage"... You shouldn't have a family/children if you only have a minimum wage job, for pete's sake.

November 21 2011 at 3:18 AM Report abuse +1 rate up rate down Reply
1 reply to Eileen's comment

Many of us have taken minimum wage jobs because that is all that is available right now. I have not acted poorly or irresponsibly but the downturn in the economy, put me out of a career. After 13 months of unemployment (only 13 weeks of that recieving any unemployment compensation) I finally got work in a minimum wage position. How excited do you think I am to brag about selling linens when I used to make a decent wage as a project manager. No responsible person starts a family on minimum wage, but a responsible person takes whatever job is available when times are difficult. Please hold back on your presumptive arrogance.

November 21 2011 at 3:40 AM Report abuse +1 rate up rate down Reply
In My Opinion Only

Grandkids are hapy with .25 cents per hour of light labor, raking leaves, etc plus bonus to the McDonalds Playground.

November 21 2011 at 1:10 AM Report abuse rate up rate down Reply

The Americans with Disability Act was passed to insure disable people were treated fairly, so how is it that employers can pay a disabled person less than minimum wage? Absolutely disgraceful!!!!

November 21 2011 at 12:12 AM Report abuse +5 rate up rate down Reply
2 replies to judyh718's comment

The thing is, a disabled person cannot perform the same duties of a normal person without reasonable accomodation

November 21 2011 at 2:33 AM Report abuse +1 rate up rate down Reply

Learn some about which you speak. A "sheltered workshop", or "work center" can employ the disabled at sub minimum wage, in order to give these people some sense of personal worth. Say that a certain job takes 1 hour, and the regional wage for that job is $20 an hour. Disabled person A takes four hours to accomplish that job, so the busines is allowed to pay him/her $5 an hour; disabled person B takes 5 hours to accomplish that job, so he/she is paid $4/hour. If the employee becomes non-functional for a period of time, he/she can be put in a time-out where no pay is accrued. Extensive record keeping is necessary, as well as regular audits by wage and hour.
This gives the disabled/handicapped worker a sense of self worth, by being a productive member of society. It is also a benefit for enlightened employers, because turnover in sheltered workshops is generally a small percentage of the industry standard.

More detail at bottom of this link: http://en.wikipedia.org/wiki/Sheltered_workshop

November 21 2011 at 3:04 AM Report abuse rate up rate down Reply

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